ATHENS Exit polls showed Greece's radical leftist Syriza party ahead in local elections in Athens and the wider Attica region on Sunday, in a surprisingly strong performance that represents a setback for the country's fragile ruling coalition.
The vote, along with European Parliament elections a week later, are being closely watched as a gauge of sentiment towards the coalition of Prime Minister Antonis Samaras, who is facing his first electoral test since coming to power two years ago.
Syriza's candidate for Athens mayor, Gabriel Sakellaridis, led the incumbent, leftist-backed independent George Kaminis, by less than 2 percentage points, two exit polls showed.
The candidate for the far-left party, which has called this month's vote a referendum on Samaras's pro-bailout, austerity policies, was also in the lead for the race for prefect - similar to state governor - of the wider Attica region.
If confirmed, the vote would raise pressure on Samaras's New Democracy party and his coalition partner PASOK, who hold a wafer-thin two-seat majority in parliament.
"It is a punishment vote and reflects the internal divisions within the ruling parties," Constantinos Routzounis, head of Kapa Research, told Reuters.
"The following Sunday, we will see whether this vote has a deeper political significance."
The Attica region, which includes the Athens municipality, counts nearly 3 million out of the 10 million eligible voters in Greece, making the two races the most closely watched in the first round of voting on Sunday.
Elections were held for mayors and town councils in 325 municipalities as well as prefects for 13 regions across Greece, with a run-off vote to be held on May 25.
After six years of recession and repeated waves of austerity measures that have shrunk incomes and pushed unemployment over 26 percent, the election is being fought as much on national issues like an unpopular EU/IMF bailout as on local ones.
"I'll vote for Golden Dawn or Syriza. Why vote for those who have robbed us? My husband's salary has shrunk to 600 euros (488.5 pounds), I'm out of work and my young son got a night job for 400 euros to help us out," said 45-year-old Vaso Stathakou, a mother of two.
"It's not a matter of ideology, I don't give a damn about their politics. My message is clear and I'll use every opportunity to send it: Get out!"
"SURROUNDED BY UNCERTAINTY"
After falling in recent months, Greek bond yields have crept up again on fears a new bout of political instability or a collapse of Samaras's government could unravel a feeble economic recovery taking root in the country after a prolonged recession.
Pollsters say the outcome of the first round could have an impact on the more crucial EU vote to be held next week, where polls show Samaras's New Democracy party lagging behind Syriza.
"To asset managers looking at Greece the vote is an event surrounded by uncertainty, hence the volatility," said Theodore Krintas, head of wealth management at Attica Bank, referring to the outcome of the EU election later this month.
"The uncertainty is due to the fact that the vote has been played up domestically as crucial to stability. Markets will reassess the situation after the vote."
In a relief for Samaras, Golden Dawn's spokesman Ilias Kasidiaris, who shot to fame after slapping a female lawmaker on live television in 2012, was in fourth place in the Athens race and seen failing to make it to the second round.
A victory by Kasidiaris would have embarrassed Samaras, who has led a crackdown against the far-right party after a party sympathizer fatally stabbed an anti-fascist rapper last year.
The far-right party's leader and senior lawmakers are behind bars pending trial on criminal charges, but the group regularly ranks as Greece's third or fourth-most popular party in opinion polls, capitalizing on anti-immigrant sentiment.
(Additional reporting by Angeliki Koutantou, writing by Deepa Babington, Editing by Angus MacSwan)